Gender, Worker Representation and the Profitability of Firms in Germany

Recent research has shown that the unexplained gender wage gap is smaller in establishments where a works council is present. The finding raises the question of whether establishment-level codetermination reduces gender wage discrimination or whether it reduces a wage differential that reflects productivity differences between men and women. This study addresses the question by examining the association between the share of female employees and profitability. Using data from manufacturing establishments, the empirical analysis suggests that there is a positive association between the share of women and profitability in establishments without a works council while there is no association in establishments with a works council. These results support the hypothesis that establishment-level codetermination reduces gender-specific wage discriminationWomen, Discrimination, Profitability, Works Councils, Piece Rates

Reciprocity and Workers' Tastes for Representation

Using unique survey data from the German Socio-Economic Panel, this study examines the influence of reciprocal inclinations on workers' sorting into codetermined firms. Employees with strong negative reciprocal inclinations are more likely to work in firms with a works council while employees with strong positive reciprocal inclinations are less likely to work in such firms. We argue that these findings conform to hypotheses derived from the experimental literature. Moreover, the results showstriking gender differences in the relationship between reciprocity and taste for representation. These differences can be partially explained by gender-specific differences in the average degree of labor force attachment.Works council, negative reciprocity, positive reciprocity, sorting, gender

Do Spillovers Stimulate Incremental or Drastic Product Innovations? Hypotheses and Evidence from German Establishment Data

We estimate the determinants of various types of product innovation. Knowledge spillovers from rivals have a positive impact on incremental innovations. This impact is largely independent of the participation in R&D cooperations. Spillovers exert no such independent influence on drastic innovation activities. The results support the hypothesis that establishments face difficulties in using knowledge that comes from areas they are not familiar with. Establishments exploit spillovers for incremental innovations rather than for drastic innovations. To a limited degree R&D cooperations can help to overcome the difficulties in using spillovers for drastic innovations. Furthermore, our estimates provide evidence that a firm?s own R&D effort and the use of outside information are substitutive. --New Products,Patents,Spillovers,Learning,R&D

Ethnic Residential Segregation and Immigrants' Perceptions of Discrimination in West Germany

Using survey data from the German Socio-Economic Panel, this study shows that immigrants living in segregated residential areas are more likely to report discrimination because of their ethnic background. This applies to both segregated areas where most neighbors are immigrants from the same country of origin as the surveyed person and segregated areas where most neighbors are immigrants from other countries of origin. The results suggest that housing discrimination rather than self-selection plays an important role in immigrant residential segregation.Segregation, immigrants, housing discrimination, self-selection

Works Councils and Employment Growth: A Reply to Addison and Teixeira

"In this reply, I argue that Addison and Teixeira’s rejoinder to my study is characteristically misleading and erroneous. While the authors agree that my investigation is interesting in its own right, they doubt that my findings indicate misspecification. But they ignore almost all of the German studies on employment growth. While Addison and Teixeira admit several serious mistakes in their tables, they do a poor job in comparing their paper with my study. Basically, they compare apples with oranges. Addison and Teixeira complain that I do not appreciate the overall contribution of their analysis. Yet, this simply distracts from the fundamental issue. Finally, the authors come up with personal allegations and attacks that are far away from good scientific style. In their attempt to discredit my study, Addison and Teixeira do even not provide correct citations of what I wrote." (author's abstract)"In der hier vorliegenden Replik argumentiere ich, dass Addison und Teixeiras Erwiderung auf meine Studie irreführend ist. Auch wenn die Autoren meine Ergebnisse als solche anerkennen, so bezweifeln sie doch, dass die Resultate einen Hinweis auf Fehlspezifikationsprobleme liefern. Dabei übersehen sie fast alle deutschen Studien, die den Zusammenhang zwischen Betriebsgröße und Beschäftigungsentwicklung untersuchen. Während Addison und Teixeira eine Reihe von Fehlern in ihren Tabellen zugeben, ist ihre Erwiderung ebenfalls durch Fehler gekennzeichnet. Um unsere abweichenden Ergebnisse zu erklären, vergleichen sie die deskriptiven Statistiken von Wachstumsraten, die auf unterschiedlichen Definitionen basieren. Der Vorwurf, ich würde ihr Gesamtwerk nicht würdigen, lenkt nur vom Hauptproblem ab. Addison und Teixeiras Erwiderung ist durch heftige persönliche Angriffe und Wertungen gekennzeichnet, die nichts mit einem guten wissenschaftlichen Stil zu tun haben. Überdies zitieren die Autoren mich nicht korrekt." (Autorenreferat

Teamwork and Intra-Firm Wage Dispersion among Blue-Collar Workers

Using data on a sample of manufacturing establishments in Germany, we find that the use of self-managed teams is associated with increased intra-firm wage inequality between skilled and unskilled blue-collar workers. We also show that moderating factors play an important role. While teamwork interacts positively with employer-provided further training and a production technology of the most recent vintage, it interacts negatively with the age of the establishment and the coverage by a collective bargaining agreement.technology, training, skill-biased organizational change, wage inequality, establishment age, collective bargaining

Betriebsräte, Tarifverträge und betriebliches Lohnniveau (Works councils, wage agreements and the company wage level)

"The article explores the question of how the German wage agreement system influences the works councils’ effects on company efficiency and on the company wage level. On the one hand, an overview of the existing theoretical and empirical research is provided. On the other hand, new empirical estimates are presented that are theoretically underpinned by a simple bargaining model. All in all, the findings in this paper indicate that the works councils are more active in generating company-specific pensions and less in distributing them if a company is obliged to pay in line with wage agreements. This is also true for medium-sized companies." (Author's abstract, IAB-Doku) ((en))Betriebsrat - Auswirkungen, Tarifpolitik, Lohnfindung, Lohnhöhe

Ökonomische Wirkungen des novellierten Betriebsverfassungsgesetzes : was können wir vor dem Hintergrund zunehmender Globalisierung und veränderter arbeitsorganisatorischer Bedingungen erwarten? (Economic effects of the amended Law on Labour Relations at the Workplace * what can we expect against the background of increasing globalisation and changes in work organisation conditions?)

"Against the background of theoretical considerations and available empirical studies, the expected effects of the amendment to the Law on Labour Relations at the Workplace (Betriebsverfassungsgesetz) are discussed. The various basic conditions are shown under which more positive or more negative consequences can be expected for firms' efficiency. Particular attention is paid to the globalisation of the economy, the reorganisation of the world of work and the extent to which firms are bound by collective agreements." (Author's abstract, IAB-Doku) ((en))Betriebsverfassungsgesetz - Änderung, Mitbestimmung, Mitbestimmungsgesetz, Betriebsrat, Arbeitnehmervertretung, Arbeitnehmerinteresse, Arbeitgebervertretung, Arbeitgeberinteresse, Arbeitsorganisation, organisatorischer Wandel, Dienstleistungsgesellschaft, atypische Beschäftigung, Betriebsgröße, Marktversagen

Do Spillovers Stimulate Incremental or Drastic Product Innovations? Hypotheses and Evidence from German Establishment Data

We estimate the determinants of various types of product innovation. Knowledge spillovers from rivals have a positive impact on incremental innovations. This impact is largely independent of the participation in R&D cooperations. Spillovers exert no such independent influence on drastic innovation activities. The results support the hypothesis that establishments face difficulties in using knowledge that comes from areas they are not familiar with. Establishments exploit spillovers for incremental innovations rather than for drastic innovations. To a limited degree R&D cooperations can help to overcome the difficulties in using spillovers for drastic innovations. Furthermore, our estimates provide evidence that a firm's own R&D effort and the use of outside information are substitutive

Performance Pay, Risk Attitudes and Job Satisfaction

We present a sorting model in which workers with greater ability and greater risk tolerance move into performance pay jobs and contrast it with the classic agency model of performance pay. Estimates from the German Socio-Economic Panel confirm testable implications drawn from our sorting model. First, prior to controlling for earnings, workers in performance pay jobs have higher job satisfaction, a proxy for on-the-job utility. Second, after controlling for the higher earnings associated with performance pay, the job satisfaction of those in performance pay jobs is the same as those not in such jobs. Third, those workers in performance pay jobs who have greater risk tolerance routinely report greater job satisfaction. While these findings support the sorting model, they would not be suggested by the classic agency model.Performance Pay, Worker Heterogeneity, Ability, Risk Preferences, Sorting